Refunds Are for Savings—Not Retirement

More than half (52%) plan to place
the money in their savings account, 25% plan to reduce debt and 17% intend to
simply spend the money, according to a survey by John Hancock.

Half of investors expect to receive
a 2014 federal tax refund, and 29% anticipate owing taxes, according to the
survey of household financial decisionmakers with a household income of at
least $75,000 and assets of at least $100,000.

Of the refund spenders, nearly four
in ten (38%) plan to spend their tax refund on a vacation, a decrease from last
year. One in five will devote their refund to basic household needs and only
one in 20 plans on using the refund for a luxury item.

In a possible indicator of tight
financial times, the results seem at odds with the recent
Hancock survey that claimed investor sentiment is peaking.

In that report, most (81%) of
respondents said 2015 would be a good year for the average investor, up from 73%
in the first quarter of 2014. Three-quarters of those surveyed also said they
are optimistic that the U.S. economy will be stronger two years from now.
Almost two out of three respondents (62%) also claimed that now is a good or
very good time to invest in stocks, stock mutual funds and balanced mutual
funds.